Watching the sale of Lanai unfold in realtime

For more than two weeks, Pacific Business News has been giving its print and online readers a day-to-day accounting of the latest developments in David Murdock’s efforts to sell the Hawaiian island of Lanai to Oracle Corp. CEO Larry Ellison.The story was followed by news organizations around the globe, as the two high-profile billionaires tried to work out a deal for one of the world’s largest privately owned islands.PBN’s coverage has been spearheaded by reporter Duane Shimogawa and Managing Editor of Digital Content Janis L. Magin. Here’s a recap of their recent work on the story, with day-to-day links for complete coverage.

Wednesday

Originally, Ellison’s purchase of Lanai was supposed to close Wednesday. But, no one was saying anything as of 5 p.m.

To read Shimogawa’s blog about how the day came and went, go here: http://bizj.us/bm99f

Tuesday

Could Oracle Corp. billionaire CEO Larry Ellison do whatever he wants to Hawaii’s island of Lanai once he owns most of it?

That was the topic Shimogawa blogged about on Tuesday for PBN’s online readers.

Politics aside, the short answer is Ellison won’t be able to do “whatever he wants,” according to new Hawaii Land Use Commission Executive Director Daniel Orodenker.

The attorney and real estate and land-use consultant told Shimogawa that in the case of Lanai, which is mostly zoned as agriculture or conservation lands, if the new owner wants to undertake a resort development per say, on ag land, he will have to ask the commission for a district boundary amendment.

For Shimogawa’s complete blog, go here: http://bizj.us/bliyh

Monday

The Hawaii Public Utilities Commission helped seal the deal on Monday when it granted preliminary approval for the indirect transfer of Lanai’s regulated utilities.

Shimogawa reported that the sale is scheduled to close on Wednesday.

The indirect transfer includes Manele Water Resources LLC, Lanai Transportation Co. and Lanai Water Co. Inc.

In its preliminary ruling, the PUC concluded that Lanai Island Holdings LLC, the company formed by Ellison for the Lanai purchase, is “fit, willing and able to provide the three public utility services will not be detrimentally affected by the indirect transfer and sale.”

June 22

This was the day that Shimogawa told PBN’s online audience that Ellison’s purchase of Lanai hinged on a quick decision by the Hawaii PUC to allow the indirect transfer of the island’s regulated utilities, including Manele Water Resources LLC, Lanai Transportation Co. and Lanai Water Co. Inc.

He reported that Castle & Cooke, Ellison and Lanai Island Holdings LLC, the legal entity formed to complete the Lanai purchase, are all requesting that the PUC grant its interim approval by Tuesday.

Shimogawa talked with PUC researcher Sean Mikell to see if such a short deadline was a possibility.

“It’s not outside the realm of possibility,” he told PBN in an online story filed Friday. “[But] to say that it is just a formality is not true.”

Mikell says that the PUC had granted similar transfers in the past, noting the case in 1999 when Seattle-based Saltchuk Resources Inc. acquired Young Brothers Ltd.

June 21

We gave some online readers their first glimpse at what Ellison was actually going to be getting when he purchased 98 percent of Lanai.

Some of those photos are shown elsewhere on this page. To see the complete slideshow, go here: http://bizj.us/bgjhx

June 20

This was the day that rumor turned to reality, after documents filed with the Hawaii Public Utilities Commission confirmed that Ellison had signed an agreement to purchase 98 percent of Lanai.

Those documents said the sale would include the two resort hotels — the Four Seasons Resorts Lanai at Manele Bay and the Four Seasons Resorts Lanai, Lodge at Koele — two championship golf courses and club houses, The Experience at Koele and The Challenge at Manele and more than 88,000 acres of land.

The price was not disclosed, but Shimogawa’s continuing coverage reported that previous estimates put the price at more than $500 million.

At this time, the sale was still pending PUC approval to transfer Lanai’s regulated utilities from Castle & Cooke Inc.

Shimogawa was able to share more background on Lanai’s potential new owner, saying that Ellison, 67, had a net worth of $36 billion as of March, and was ranked No. 6 on Forbes magazine’s list of the world’s billionaires. He is also the third-richest man in the United States, behind No. 1 Bill Gates and No. 2 Warren Buffett of Berkshire Hathaway.

Immediately, the speculation turned from “who” to “what,” as in what would Ellison want with Lanai.

Here’s what Tom Kiely, one of those who was speculating, told Shimogawa.

“[Ellison] has a reputation for building a great business and being a sportsman and philanthropist, this bodes well for Lanai,” said Kiely, who is one of the owners of Hotel Lanai. “My fear was that the island would be divided up in 50 or so parcels by different developers, but now I’m just really relieved about this.”

Our coverage also helped readers understand that Murdock’s potential sale of Lanai did not mean he was leaving Hawaii.

In addition to his home on Lanai, Murdock will retain the rights to develop a potential wind farm on the remote northwestern part of the island.

Castle & Cooke, which Murdock owns, and Dole Food Co. Inc., of which the billionaire is the majority shareholder, have long histories in the state and will continue as one of its largest landowners.

June 19

There were no new developments in the story on this day, but the rumor mill was working overtime as word spread to all parts of the globe.

In the midst of the chaos and speculation, Shimogawa got an email from a German-based company that sells high-profile islands.

What follows are excerpts from the ensuing conversation between Shimogawa and Farhad Vladi of Vladi Private Islands.

Vladi, whose Hamburg-based company has sold more than 2,000 islands and manages 1,000 others, said it recently sold an island to a member of the Forbes 100 list, so it feels it knows what buyers are looking for in an island.

Vladi said he is all too familiar with the challenges associated with trying to sell a private island. Lanai’s case reminds him of a similar property in Scotland called Eigg Island.

He said some years ago, the 8,000-acre island was put on the market and 95 percent of it was included in the sale. The other 5 percent was excluded, in which a few hundred people were living.

For Shimogawa’s complete blog of his conversation with Vladi, go here: http://bizj.us/beqv9

June 18

Word about what was then the possible sale of Lanai spread fast after Shimogawa got Harry Saunders, the CEO of Castle & Cooke Hawaii, to confirm Murdock’s intentions to sell.

On this day, Shimogawa reported who the two most probable buyers of the Hawaiian island likely were going to be.

Here’s how we reported it in realtime: “Rumors have been spreading for some time now that two prominent American businessmen, Larry Ellison, co-founder/CEO of Oracle Corp., and Bill Gates of Microsoft-fame may be likely candidates to buy Lanai. Gates and his wife, Melinda, rented out the entire island for their wedding in 1994, and Ellison has a home on Lanai.”